2011 brought numerous new challenges for the ­PGNiG Group. Thanks to the consistent policy pursued by the Management Board, the support of the Supervisory Board, as well as the effort and devotion of all ­PGNiG Group employees, those challenges were tackled successfully. Careful and responsible actions allowed the Company and the Group to flexibly adapt to the changes taking place in the market environment, and make further bold steps on the way to creating a modern company with stable operations and a robust financial position.

Among the key projects implemented by ­PGNiG, the most noteworthy ones are the successfully completed first drilling on a shale gas deposit in Pomerania, and the finalised purchase of Vattenfall Heat Poland. Those events are of paramount importance to the pursuit of the ­PGNiG’s strategy. The former confirms correctness of the policy of exploiting opportunities to produce gas from unconventional sources in order to ensure security of supplies to the customers and increase the share of domestically produced gas in the sales structure, while the latter shows that the Group is evolving into a multi-energy company, which builds its value on other assets as well as gas.

In the past year the Company continued many major investment projects, including development of the LMG (Lubiatów-Międzychód-Grotów) oil and gas field, which is expected to nearly double the annual production of crude oil starting from the next year, and expansion of the largest underground gas storage facility in Wierzchowice. Thanks to the projects completed in 2011, coupled with the day-to-day operations in the Exploration and Production, Distribution, and Trade and Storage segments, as well as in the area of heat and electricity generation, the Company was able to hold on to its leading position on the market. The Supervisory Board not only oversaw all areas of ­PGNiG’s operations, but also cooperated with the Management Board in the implementation of key projects, supporting all initiatives conducive to the development of the whole Group.

I believe that in the near future the Group’s intensified efforts towards meeting the set objectives will prove soundness of the ­PGNiG’s strategy, and will fundamentally contribute to a growth in the Group’s value. I am aware of the difficult tasks we are facing in connection with the gas market liberalisation. Let me assure you that, within the scope of its powers, the Supervisory Board of ­PGNiG will continue to work hand in hand with the Management Board and the employees, seeking to maintain, or even improve the Group’s market position and increase the Group’s value. The confidence placed in us by the Shareholders and Clients demonstrates that the directions we have adopted in our activities are correct and encourages us to continue our efforts.

Ladies and Gentlemen,

I would like to extend heartfelt thanks to all those who offered their commitment and support to the Company in 2011. I would like to particularly thank the employees of the ­PGNiG Group, the Management Board of ­PGNiG SA, and my colleagues from the Supervisory Board. The projects we have implemented and further, consistently pursued ambitious tasks provided for in the ­PGNiG Group’s strategy, allow us to look into the future with optimism.

Yours faithfully

Wojciech Chmielewski
Chairman of the Supervisory Board

Shale gas Licences Shale gas production Safety An opportunity for Poland

Polish Oil & Gas Company (PGNiG SA) KRS 0000059492, NIP 525-000-80-28, share capital 5 900 000 000 PLN - fully paid Headquarters - 25 M. Kasprzaka Street, 01-224 Warsaw, Poland Phone: +48 22 589 45 55, Fax: +48 22 691 82 73